Biden to extend mortgage relief, foreclosure moratoriums
The move marks the second action Biden has taken to lengthen the forebearance
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The Biden administration announced on Tuesday it will extend a federal moratorium on home foreclosures and aid for Americans who are struggling to keep up with their mortgage payments during the ongoing coronavirus pandemic.
This move marks the second time Biden has lengthened the ban, which was initially enacted during the Trump administration.
"The COVID-19 pandemic has triggered a housing affordability crisis," the White House said in a statement. "Today, 1 in 5 renters is behind on rent and just over 10 million homeowners are behind on mortgage payments. People of color face even greater hardship and are more likely to have deferred or missed payments, putting them at greater risk of eviction and foreclosure."
Originally, the ban was set to expire at the end of March, alongside the U.S. Centers for Disease Control and Prevention's (CDC) federal moratorium on evictions for not paying rent.
The eviction moratorium was not included in the most recent actions, though a White House official reportedly told USA Today that they have been meeting with stakeholders to discuss the next steps on the eviction policy.
FILE - In this Thursday, Jan. 21, 2021 file photo, President Joe Biden stands during a performance of the national anthem, during a virtual Presidential Inaugural Prayer Service in the State Dining Room of the White House, in Washington. (AP Photo/Al …
Under this new extension, homeowners enrolled in a forbearance plan on or before June 30 will be able allowed to defer mortgage payments for an additional six months.
"President Biden is committed to protecting homeownership and housing stability as America begins to turn a painful crisis into a robust recovery. Today’s extended forbearance and foreclosure programs are an important step towards building stronger and more equitable communities," the White House said.
The departments of Housing and Urban Development, Veterans Affairs, and Agriculture would coordinate to ensure their actions would "reach the greatest number of Americans."
“Extending the forbearance available on federally-backed mortgages is a critically important move to preserve homeownership for millions of households that have seen income disruption or outright job loss due to the pandemic," Bankrate chief financial analyst Greg McBride told FOX Business. “The 6 months’ of additional forbearance – available in 3-month increments – reflects the reality that long-term unemployment will be an ongoing issue even once the pandemic is behind us and the economy begins to reopen."
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The White House also called for the passage of Biden's $1.9 trillion COVID-19 rescue plan, which would create a Homeowners Assistance Fund and provide states with $10 billion to help struggling homeowners.
Last week, the Federal Housing Finance Agency extended forbearance by three months for borrowers. The administration said the coordinated actions would add up to coverage of 70% of existing single-family home mortgages collectively.
There are 2.7 million homeowners enrolled in pandemic forbearance and 11 million government-backed mortgages across the country.
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Critical resources for homeowners and renters will be posted on the Consumer Financial Protection Bureau's website.